Grant Faces Discipline Over Role In Esm Failure

The state panel that regulates Florida accountants will consider this week disciplinary measures against the firm that audited ESM Government Securities Inc.

Under the proposed agreement between Alexander Grant & Co. and the Florida Board of Accountancy, Grant will agree not to accept any new compilation, review or audit clients for 60 days and to have the procedures at all its offices reviewed by another accounting firm.

The stipulation agreement covers all the Chicago accounting firm`s Florida offices, not just the Miami office led by the auditor who has been charged with accepting payment from ESM`s officers and with forging the will of ESM`s former chief financial officer. The accountant, Jose Gomez, is no longer with Alexander Grant. The disciplinary measures stem directly from the ESM case, according to Martha Willis, executive director of the accounting board.

The accounting firm directed questions to a New York spokesman, who was not available Monday afternoon.

The board will consider the measures at its monthly meeting in Miami Thursday. The board, made up of seven accountants and two consumer members, is appointed by the governor and oversees the licensing of Florida accountants.

When the Securities and Exchange Commission closed down ESM in March, the securities firm owed about $300 million more than it could pay to municipalities and financial institutions that had engaged in government securities repurchase agreements.

Gomez, until March the head of Alexander Grant`s South Florida offices, is under indictment on criminal charges that he helped with the forgery of the will of Alan Novick, ESM`s former chief finanacial officer, who died late last year. Gomez came to an out-of-court agreement with the SEC to repay the money he allegedly accepted from ESM officers but, as part of that agreement, neither admitted nor denied guilt. He has already relinquished his Florida accounting license.